JENNIFER MOORE, d/b/a SILLY BEAR DAYCARE, and WILLIE MOORE, III, Appellants (Defendants),
MICHAEL WOLITITCH, DEBORAH WOLITITCH, MICHAEL P. BUNTEN, BARBARA J. HANDLEY, and PAMELA JERKE, Appellees (Plaintiffs)
Appeal from the District Court of Laramie County. The Honorable Thomas T.C. Campbell, Judge.
Representing Appellants: Donna D. Domonkos of Domonkos Law Office, LLC, Cheyenne, Wyoming.
Representing Appellees: James R. Salisbury and Anthony M. Reyes of Riske & Salisbury, P.C., Cheyenne, Wyoming. Argument by Mr. Reyes.
Before BURKE, C.J., and HILL, KITE, DAVIS, JJ., and GOLDEN, J., (Ret.).
GOLDEN, Justice (Ret.).
[¶1] Plaintiffs, several residents in the Milatzo Subdivision in Cheyenne, Wyoming, filed a complaint against Defendants Jennifer Moore, d/b/a Silly Bear Daycare, and Willie Moore, III, seeking to permanently enjoin Defendants from operating a daycare business out of their residence in the Milatzo Subdivision. The district court found that Defendants' daycare operation violated the protective covenants governing properties in the Milatzo Subdivision, that those covenants had not been abandoned, and that the violation harmed Plaintiffs. Based on those findings, the court granted Plaintiffs' request for a permanent injunction enjoining Defendants from operating a daycare business out of their residence. We affirm.
[¶2] Defendants present a single issue for this Court's review, which they state as follows:
Whether the district court's finding that the covenants in Milatzo Subdivision have not been abandoned is clearly erroneous.
[¶3] On August 31, 2012, Defendant Willie Moore obtained title to a home located in the Milatzo Subdivision in Cheyenne, Wyoming. The home is subject to protective covenants that were recorded on June 27, 1979. The protective covenants specify in Paragraph No. 1 that " [n]o lot shall be used except for residential purposes," and they further state in Paragraph No. 17 that " [n]o residential lot shall be used as a business."
[¶4] In September 2012, Defendants began operating the Silly Bear Daycare out of their home. Defendant Jennifer Moore is the sole owner of the daycare business and is licensed to provide care for up to fifteen children. She has one employee to assist in the operation.
[¶5] On October 17, 2012, Plaintiffs, several residents in the Milatzo Subdivision, filed a complaint seeking preliminary and permanent injunctive relief to enjoin Defendants from operating a daycare business out of their residence. On October 19, 2012, Plaintiffs filed an amended complaint seeking the same relief. Plaintiffs alleged that Defendants' daycare operation violated the protective covenants' provisions that limited use of property in the Milatzo Subdivision to solely residential uses and prohibited the use of any such property as a business.
[¶6] On October 30, 2012, Defendants filed an answer by which they asserted affirmative defenses that the protective covenants had been abandoned and that Plaintiffs' enforcement action was racially motivated by Defendants' racially-mixed marriage. Defendants also asserted a counterclaim for damages caused by the alleged racially motivated enforcement action.
[¶7] On November 28, 2012, the district court issued an order denying Plaintiffs' request for a temporary restraining order based on its finding that Plaintiffs had not met their burden of showing irreparable harm. A bench trial was held on September 3, 2013, and on May 21, 2014, the court issued an order granting Plaintiffs a permanent injunction and dismissing Defendants' counterclaim. In so ruling, the court found, in part and with citations omitted:
10. The Defendants did not establish the abandonment of the covenants. The incidental in-home meetings, parked work trucks, or phone numbers associated with businesses do not make out wholesale abandonment or even a credible argument that substantial, permanent, business activities were being conducted by others.
Plaintiffs' testimony was credible and realistically conveyed the history of the neighborhood. Clearly whatever occasional or incidental conduct of business was not substantial or routine. Nor were the handful of set-back or lot line discrepancies evidence of activity that would indicate the nature of the neighborhood created by the Subdivision covenants was changed or that the purpose of the covenants in question had been defeated.
11. In contrast the Defendants['] use is a substantially more direct affront to the covenant. They operate a licensed full time business, advertise it as such, and have employees on site. By the very nature of the business, customers are coming and going from the neighborhood twice a day each. The harm resulting [from] this purposeful violation is more than sufficient to justify relief.
12. The Defendants having flagrantly ignored what they knew to be a restriction on their use of the property weighs heavily against their argument, now that they have been confronted, that other owners had also violated a number of the Subdivision covenants. They did not act in good faith and equity weighs against them. The Plaintiffs are harmed in an ongoing and permanent way and are entitled to equitable relief.
[¶8] On June 5, 2014, Defendants timely filed their Notice of Appeal to this Court.
STANDARD OF REVIEW
[¶9] " Following a bench trial, we review the trial court's findings of fact for clear error, and its conclusions of law de novo." Clark v. Ryan Park Prop. & Homeowners Ass'n, 2014 WY 169, ¶ 6, 340 P.3d 288, (Wyo. 2014) (quoting Fox v. Wheeler Elec., Inc., 2007 WY 171, ¶ 9, 169 P.3d 875, 878 (Wyo. 2007)). We have further explained:
The factual findings of a judge are not entitled to the limited review afforded a jury verdict. While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail re-weighing disputed evidence. Findings of fact will not be set aside unless they are clearly erroneous. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
Miner v. Jesse & Grace, LLC, 2014 WY 17, ¶ 17, 317 P.3d 1124, 1131 (Wyo. 2014) (quoting Claman v. Popp, 2012 WY 92, ¶ 22, 279 P.3d 1003, 1012 (Wyo. 2012)).
[¶10] Finally, in reviewing the evidence, " we assume that the evidence of the prevailing party below is true and give that party every reasonable inference that can fairly and reasonably be drawn from it." Miner, ¶ 17, 317 P.3d at 1131 (quoting Claman, ¶ 22, 279 P.3d at 1012).
[¶11] On appeal, Defendants do not challenge the district court's dismissal of their race discrimination claims, the court's finding that their daycare operation is a business, as that term is used by the protective covenants, or the court's finding that the daycare operation harms Plaintiffs. Defendants' sole challenge is to the court's finding that the protective covenants were not abandoned. In appealing that ruling, Defendants make two arguments: A) that the court erred in finding that existing covenant violations were not sufficient to warrant a finding that the covenants were abandoned; and B) that the court erred in finding that equity weighs against Defendants because they flagrantly ignored the restriction on operating a business in the Milatzo Subdivision. We will first address the abandonment finding and then turn to the court's equity finding.
A. Abandonment Finding
[¶12] Whether a protective covenant has been abandoned as a result of acquiescence in violations of the covenant is a question of fact that depends on the particular circumstances of each case. Keller v. Branton, 667 P.2d 650, 654 (Wyo. 1983). To
find an abandonment, the violations acquiesced in must be
so great, or so fundamental or radical as to neutralize the benefits of the restriction to the point of defeating the purpose of the covenant. In other words, the violations must be so substantial as to support a finding that the usefulness of the covenant has been destroyed, or that the covenant has become valueless and onerous to the property owners.
Hammons v. Table Mountain Ranches Owners Ass'n, 2003 WY 85, ¶ 14, 72 P.3d 1153, 1156 (Wyo. 2003) (quoting Keller, 667 P.2d at 654.)
[¶13] This Court has further explained that for a change in the neighborhood to justify a finding of abandonment, the " change must be of a radical and permanent nature." Keller, 667 P.2d at 654 (quoting 7 Thompson on Real Property, § 3174 (Bobbs-Merrill Co., Inc. (1962)). " Where a violation is immaterial, minor, unoffensive, or remote from the land, no acquiescence will be presumed." Keller, 667 P.2d at 654 (citing 7 Thompson on Real Property, § 3173). Finally, the burden of proving a change in the neighborhood is on the party asserting the protective covenant's abandonment. Keller, 667 P.2d at 654 (citing Moore v. McDaniel, 48 Ill.App.3d 152, 362 N.E.2d 382, 5 Ill.Dec. 911 (Ill. App. 1977)).
[¶14] In support of Defendants' allegation that the protective covenants governing the Milatzo Subdivision were abandoned, Defendant Jennifer Moore testified to numerous trailers, sheds, boats, unregistered vehicles, and other items present on various properties throughout the Milatzo Subdivision. On appeal, Defendants cite to additional testimony showing:
-- the keeping of a yard shed by Plaintiffs Michael and Deborah Wolititch that is located eight feet from the side property line rather than the ten feet required by the covenants;
-- Deborah Wolititch's babysitting of up to two to three children at a time, which children were unrelated to her and for which service she was compensated;
-- the operation of an identity theft victim assistance business by Milatzo Subdivision resident Becky Burney and her hosting of presentations related to that business;
-- the keeping of a yard shed by Plaintiff Barbara Handley that is located less than the required ten feet from the property line;
-- the keeping of two trailers on her property by Plaintiff Barbara Handley, which is in excess of the one trailer permitted by the covenants;
-- the use by Plaintiff Michael Bunten of his home address in the Milatzo Subdivision as his business address;
-- the keeping by Plaintiff Michael Bunten of a trailer and storage of landscaping equipment at his home;
-- the occasional meeting with crew members at the home of Plaintiff Michael Bunten before leaving to go to a job site;
-- the keeping by subdivision resident Charles Baca of a trailer advertising " Pro Baca Windows and his keeping of four ...